There’s little doubt that we are living in a “selfie” culture. The once-mundane activities of exercising at the gym, driving to work, or simply making coffee are now social spectacles that win attention and, in some cases, profit. This impulse to share daily tasks begs us to rethink the meaning of “personal” – and now consumers have even begun to expose sensitive information like their financial behaviors.
Today's channels that bridge social connections are increasingly playing into consumers’ personal financial management tactics. Forrester’s Consumer Technographics® survey data shows that the number of US online adults logging into their financial accounts through social media has more than tripled in the past two years. In fact, more consumers are turning to both social channels and their cameras to forge closer interactions with financial services providers overall:
I spent Tuesday and Wednesday of this week at Finovate Europe. As always, it is a great way to spend two days thinking about digital financial innovation and how firms can deliver better experiences for their customers. Here are a few of my impressions from the two days:
Biometrics is becoming mainstream.We barely raise an eyebrow when shown authentication processes by firms like eBankIT, ID Mission, Jumio, Nice Systems and Wipro that use facial recognition, fingerprints or voice recognition because these technologies now seem almost commonplace. Yet the technologies are hugely impressive and far advanced on what was available or even possible a decade ago.
Future generations will pay differently. The credit card is one of the greatest financial innovations of all time. Yet, despite the various card innovations on show, I cannot rid myself of the belief that plastic cards will one day soon start to seem as quaint and outdated as cheques (and, indeed, business cards). There are many big obstacles on the path to mainstream mobile payment adoption, and payment habits take decades to change, but I don’t think the future is bright for plastic cards.
I’ve spent the past two days at Finovate Europe in London, which must be one of the more thought-provoking ways anyone in digital financial services can spend two days.
Here’s my perspective on the lessons from the event for digital financial services executives:
More people are focusing on the small business opportunity. There were far more companies proposing to help small businesses manage their finances this year, in numerous ways from access to capital through to document storage and expense management. I was particularly impressed by the work that Efigence and Idea Bank have done to help Idea Bank’s small business customers manage their finances.
Automated financial advice for mainstream customers is edging closer. For years, Forrester has talked to its clients about the huge opportunity, and pressing need, for financial firms to use software to automate the production of financial advice. A growing number of firms are trying to solve this problem from one angle or another, including Money On Toast, Vaamo, Your Wealth and Yseop. Perhaps the best quotation of the event came from Elizabeth Farabee at Yseop: “A banker doesn’t sell the customer the best product, but the product he knows best.” Automating the manufacture of advice can fix that.
I’ve spent the past two days at Finovate Europe in London, which has rapidly established itself as the leading European retail financial technology event of the year. This year’s event was bigger than last year’s, with 64 exhibitors spread over the two days.
Here are my impressions from the two days:
Innovation is hard and usually incremental. Our expectations are so high. It’s easy to sit in the audience and think ‘I’ve seen something like that before’. It’s a lot harder to develop truly new ideas, let alone build them and market them. Innovation is necessarily incremental, moving into the adjacent possible opportunity as my colleague James McQuivey puts it (see him explain it on video here). True invention is extremely rare. As James puts it in his new book, “The most powerful ideas consciously draw from and incorporate elements that were being developed by others along the way, ultimately generating the best outcome in the shortest time at the most efficient cost.” That’s what makes events like Finovate so useful.
Over the past decade, BBVA has worked hard to become more customer centric and match its offerings to its customers’ needs. Given the pace of technology change, customers’ rising expectations and the digital disruption those forces cause, innovation is a critical part of the role of eBusiness and channel strategy executives. I thought I would share a few of Gustavo’s insights here for those of you who couldn’t attend. BBVA has become systematically innovative, launching a continuous succession of innovations many of which were a first in Spain, in Europe or in the world, such as:
Back in November 2006, a startup called Wesabe first showed the potential of online money management. Packaged personal financial management (PFM) software for PCs like Intuit's Quicken had existed for years, but Wesabe, Mint.com and a handful of other startups showed the value of using customer data, and community, to help people understand their finances better.
Since then, hundreds of banks, credit unions, wealth management firms, and other companies have launched a range of spending categorization, budgeting, peer group comparisons, and other money management features for their customers.* The leaders are increasingly making money management available in mobile and tablet apps, as well as on their websites. Fuelled by the poor state of many of the world's developed economies and growing use of digital channels, customer interest in online money management is substantial, as my colleague Reineke Reitsma wrote on her blog a few months ago.
Yet despite the growing number of firms that already offer money management, and the evident interest of some customers, many financial services eBusiness executives still question whether the business case adds up. Our new report on The Business Case For Personal Financial Management addresses that question. Here's what we found:
There are a number of firms that we watch closely at Forrester because they stand out for sustained innovation. Behind the technology giants like Google and Apple, there are a number of established firms that are using technology to adapt rapidly and successfully to changing customer behaviour and needs. One of them is Commonwealth Bank of Australia. Over the past four to five years CommBank has introduced a series of digital innovations to serve its customers better including:
Finest Online. In the course of its "Finest Online" project from 2007 to 2009, CommonwealthBank of Australia redesigned its NetBank Internet banking service with the objectives of building an excellent customer experience and driving online sales. The bank implemented new content and functionality to support the customer journey and integrated new secure site sales processes with in-person channels and the bank's multichannel customer relationship management (CRM) system. The two-year, cross-organizational project boosted online sales, increased customer satisfaction, and improved the bank's image. (Forrester clients can read our case study.)
At our Marketing & Strategy Forum last November, Sean Gilchrist, head of digital banking at Barclays Bank, talked passionately about the importance of customer experience to the work being done by his team at Barclays. It's good to see some of the results of that focus on customers in two innovations introduced by Barclays in the past few weeks:
Firstly, Barclays has started rolling out a new online banking interface. While I'm sure that not every customer will like the change, the point is that Barclays is taking a modular (or widget-like) approach to displaying content and functionality in anticipation of having to serve customers on a rapidly growing range of digital devices. We think that approach is going to become increasingly common as eBusiness teams adjust to the fragmentation brought by the Splinternet.
For those of you who aren’t familiar with Finovate, it’s a fast-paced format with seven-minute live demos and pitches from 35 financial technology vendors. It’s produced by Online Financial Innovations, the people behind the excellent NetBanker blog.
I was lucky enough to go along to the show in London today. Unlike last year, when four or five themes dominated the day, this year’s exhibitors were more diverse. Among them were: